Geely Holding has received unconditional approval from China's market regulator to acquire a 34% stake in Ford Espana, S.L., the Spanish unit that operates Ford's Valencia assembly plant. The deal, first announced in July, marks the second handshake between the two automakers after Geely bought Volvo from Ford in 2010 for $1.8 billion. This time, Geely is paying 221 million euros (about $260 million) for a minority stake in a plant with an annual capacity of around 500,000 vehicles, according to Chinese outlet First Electric (d1ev.com).
The transaction was cleared by the State Administration for Market Regulation on September 21-27, as part of a list of unconditionally approved business concentrations. After the deal closes, Ford will hold 66% of Ford Espana and Geely 34%, with joint control. The Spanish plant, located in Almussafes near Valencia and built in 1976, currently produces only the Ford Kuga and has long operated at low capacity utilization. Its 4,142 employees will transfer to the joint venture.
Contract manufacturing only
The joint venture will focus exclusively on contract manufacturing, with no independent sales, design, R&D, branding, or distribution functions. It is scheduled to start operations in the first half of 2027, with the first new model rolling off the line in 2028. Under the product plan, the factory will continue building the Kuga, add the Bronco compact hardcore SUV in 2028, and produce a new crossover designed by Ford and co-developed with Geely. Geely will also build two new-energy SUVs at the site.
For Geely, the main prize is tariff relief. The European Union's countervailing duties on Chinese-made EVs apply an 18.8% rate to Geely, which combined with the standard 10% car import duty totals 28.8%. Producing locally in Spain sidesteps those charges entirely. Analysts estimate that securing an annual production quota of 150,000 units through this deal would cost only 10% to 20% of building a new factory, making the 221 million euro investment a bargain for a third of a mature European plant's capacity.
From brand buyer to capacity sharer
The deal reflects a shift in Geely's strategy in Europe. In 2010, it bought the Volvo brand outright from Ford; now it is sharing capacity with Ford rather than acquiring a brand. The arrangement also gives Ford a way to keep its Spanish plant viable while offloading some investment risk. For Geely, the partnership offers a low-cost entry into European manufacturing at a time when tariffs are reshaping how Chinese automakers approach the region.
